Fannie and Freddie Crash

Diamond Foods (NASDAQ: DMND) hit a two-year high after second-quarter profits came in higher than expected, with the company also maintaining its full-year guidance. Last Friday, Coupons.com (NYSE: COUP) rose 88% on its first day of trading, with shares only pulling back slightly since then. Fannie Mae (NASDAQOTCBB: FNMA) and Freddie Mac (NASDAQOTCBB: FMCC) fell again today after the U.S. Senate Banking Committee announced plans to overhaul the mortgage market. And shares of apparel retailer Express (NYSE: EXPR) dropped after the company missed on fourth-quarter profits. Traffic to the company's stores was down, and the company also lowered guidance.

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Many banks such as Bank of America and Wells Fargo have reduced their mortgage department. Some banks have only one loan officer working multiple branches! The immanence collapse of the U.S. economy is on the horizon from instability of the housing market!

Here's why they are trying to kill Fannie and Freddie. I think winding down Congress and replacing it with something more efficient is a better idea

Bloomberg: ‘Plain and simple,’ Congress caused the mortgage crisis, not the banks. Mayor Michael Bloomberg said this morning that if there is anyone to blame for the mortgage crisis that led the collapse of the financial industry, it's not the "big banks," but Congress. Speaking at a business breakfast in midtown featuring Bloomberg and two former New York City mayors, Bloomberg was asked what he thought of the Occupy Wall Street protesters. "I hear your complaints," Bloomberg said. "Some of them are totally unfounded. It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp. Now, I'm not saying I'm sure that was terrible policy, because a lot of those people who got homes still have them and they wouldn't have gotten them without that. "But they were the ones who pushed Fannie and Freddie to make a bunch of loans that were imprudent, if you will. They were the ones that pushed the banks to loan to everybody. And now we want to go vilify the banks because it's one target, it's easy to blame them and congress certainly isn't going to blame themselves. At the same time, Congress is trying to pressure banks to loosen their lending standards to make more loans. This is exactly the same speech they criticized them for."